VettaFi’s head of ETF research Todd Rosenbluth joined CNBC’s ETF Edge program Monday to talk all things ETFs. This week, the conversation focused primarily on emerging markets ETFs and factors like Chinese consumer spending.
VettaFi’s Rosenbluth talks emerging markets ETFs on ETF Edge.
China’s reopening following the end of its “zero-COVID” regime won’t happen all at once, said KraneShares CIO Brendan Ahern. Those consumers are still rising quarter by quarter, and that’s increasing interest in emerging markets ETFs according to VettaFi data, Rosenbluth noted.
“We’re seeing strong interest in emerging markets. Many advisors are telling us at VettaFi that they’re looking to reduce their home bias,” Rosenbluth said.
Emerging Markets ETF Strategies
Those same advisors are then looking to add exposure to emerging markets equities, he added. Some strategies benefiting include the Vanguard FTSE Emerging Markets ETF (VWO) and the iShares MSCI Emerging Markets ETF (EEM).
Those emerging markets ETFs seeing interest include the KraneShares China Internet and Covered Call Strategy ETF (KLIP), as well. KLIP offers an income-focused variation of the well-known KraneShares CSI China Internet ETF (KWEB), which launched almost a decade ago. Whereas KWEB tracks an index of Chinese software and internet stocks, KLIP offers a reduced-volatility alternative.
“We’re seeing strong interest in KLIP. People are looking to reduce the volatility in their China-dedicated exposure and KLIP is a great way of doing that,” Rosenbluth added.
Outside of emerging markets, commodity ETFs have also received interest per VettaFi data. Precious metals including gold have seen engagement for strategies like the SPDR Gold Shares ETF (GLD), Rosenbluth mentioned.
That said, interest in active commodities ETFs has stood out in VettaFi’s advisor data. That’s benefitted ETFs like the Neuberger Berman Commodity Strategy ETF (NBCM), which offers diversified commodities exposure in an active strategy.
“Gold may not continue to be in favor forever in 2023,” Rosenbluth said. “So investors might want the benefits of active management to rotate.”
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